Mortgage advice - First time buyer, on a DMP

JamesC3

Hi All,
I am looking for some advice please. I privately rent with my wife and two kids. Years ago I had a big gambling problem which led me to big debt. I signed up to a DMP years ago and have paid off 75% of this now. I'm now in a much better position, no gambling, kids are at school and my wife is going to return to some part time work.
Next year I would like to buy our first house and have begun saving, I don't want to pay a fortune for advice at this moment, but appreciate I will have to pay for advice a little further down the line, I just wanted some general guidance if at all possible.
I'm estimating the house on it's own will cost £300k-£350k. This time next year we hope to have £25k-£30k saved up. My iniital thought was to look at Shared Ownership, but from doing a Google search I have read that isn't possible on a DMP. I read that somoene with a 'good' credit history ould require a 15%-20% Deposit. Being on a DMP my creidt history isn't excellent. From running a Credit report on here (Money Saving Club), I just and I mean just sneak in to the Good category.
Would my best option be to:
1) Pay off the DMP first then start saving?
2) Forget about the SharedOwnership?
3) Save for 2/3 years then look again?

Any help greatly appreciated.
Kind regards,
James

blue_max_3

I'd say do 1 & 2 and see where you are at then. Personally, I'd always advise against a shared ownership property, but that's just me. You've really turned your life around, so great to hear. Hope you reach your goal.

haras_n0sirrah

there is a lender on shared equity who is ok with dmp's as long as they have been maintained and good conduct 

ACG

Shared ownership will limit your options.
I had a case agreed today where the customer had been bankrupt and had a repossession 3 years ago with a 20% deposit, had we made the application last month we would have been able to get a 95% mortgage. I expect when corona dies down if the world goes back to normal you will be able to get a 90% mortgage at normal rates from what you have said. 

JamesC3

Thanks for the replies.
Just for a guide I looked at Rightmove and selected a few properties on there, they then have a Mrtgage calculator from Nationwide on there. I know it was only an indication and not a credit report, but they had a 95% LTV after I input my finances in there.

One more question. I read on the MoneySaving Expert that Payday Loans are a big no for mortgage applicants and even having one can kill off a mortgage application. Does that mean "if you ever have had one" or "in the past year" etc?

During the dark days, I had plenty of Payday loans......I finished using them last year and paid off the final one about 8 months ago.
I don't want to through a year of saving and hoping when I just get turned down immediately on the basis of that as we'd be better off just looking for a 'nicer' house to rent and pay more to privately rent.

ACG

Forget the calculator, Nationwide are not even offering 95% Mortgages at the minute. 
Pay Day loans....
Some lenders will be an outright decline if they can see a PDL in the last 6 years, others 1 year, others 6 months and others do not really mind. I submitted a case to a lender in December, they declined it as the customer took out a PDL 22 days prior to the application. They told me to come back in 3 months, we applied again 9 weeks later as we received notification they were pulling their 90% products the following day and the underwriter accepted the case - he now has a full mortgage offer. 

At 8 months, you will find some lenders will not accept you, but it can be overcome now at normal rates. 

JamesC3

Many thanks for your reply. All is not lost then.